FCC chief eyes leasing TV spectrum to independents

By Rachelle Younglai

WASHINGTON (Reuters) - The Federal Communications Commission chairman said on Friday he wants to make it possible for small and independently owned businesses to lease television spectrum from broadcasters, to promote diversity in the industry.

"Small businesses that are often owned by women and minorities would be the primary beneficiaries of this initiative," Kevin Martin told a conference held by the American Women in Radio and Television.

"This would help ensure that viewpoints and perspectives of these groups are represented on the air. It would also create new job opportunities in the broadcast industry."

Broadcasters do not always use all their assigned capacity. "Often there is additional spectrum left over that can be used to air other channels of programming," Martin said. "Small and independently owned businesses could take advantage of this capacity and use it to air their own programming."

Martin said part of the challenge in creating new TV opportunities is the limited number of channels now available, as well as the high start-up cost of building a broadcasting station, which can run to many millions of dollars.

"Access to capital can prove to be one of the greatest challenges to becoming a station owner," Martin said.

Martin said he would start talking to his fellow four commissioners about his idea. He would need the support of at least two of them to proceed.

FCC Commissioner Robert McDowell has not been presented with anything on paper yet but said he "would review it with an open mind when it arrives." Calls to the other three commissioners were not immediately returned.

Martin gave no timetable but the U.S. conversion to digital television from analog is targeted for February 2009, and digital operations allow broadcasters to fit a single channel of programming into a smaller amount of spectrum, or space.

Martin told reporters after his speech that FCC rules must be clarified if broadcasters lease capacity to another programming stream.

"For example, what public interest obligations would apply to that additional programming stream?" he said.

"I think we should be treating these additional programming streams that are leasing capacity from the broadcasters like they're their own independent voice, so they have the same obligations to put on three hours of children programming a week ... but they also have the opportunity to get carriage on local cable systems."

In radio, the FCC has already tried to help small businesses by creating the "Low Power FM" service -- an FM station that has a smaller range of service and a lower cost. Building a low power station can cost as little as $10,000.